Kohl’s trades 4% higher following stronger than expected financial results in the fourth quarter

Kohl’s
revealed its fourth-quarter performance results on Tuesday that beat analysts’
estimates for sales and earnings. Kohl was reported trading 4% higher in the
stock market on Tuesday following the report.

CEO
Michelle Gass commented on the earnings report on Tuesday and highlighted that
online and traditional traffic to Kohl’s stores saw a massive improvement in
the recent quarter. She attributed the better than expected results to the new
brands that Kohl’s before or during the last year’s holiday season.

Kohl’s
Q4 Performance Results Versus Analysts’ Estimates

According
to Refinitiv, analysts were expecting the
largest U.S department store retail chain to print $6.52 billion in net
sales in the fourth quarter. In terms of earnings, their estimate was capped at
$1.88 per share. Experts had also forecast a 0.1% decline in Kohl’s same-store
sales in the recent quarter.

In
its earnings report on Tuesday, the company said it generated a higher $6.54
billion in net sales in Q4 while it claimed to have made $1.99 of earnings per
share in the recent quarter. Kohl’s same-store sales in the fourth quarter
remained flat.

In
the quarter that ended on 1^st February, Kohl’s net income dropped to
$265 million versus a higher $272 million that was recorded in the same quarter
last year. Kohl’s Q4 total revenue was posted at $6.83 billion as compared to a
marginally lower $6.82 billion in 2018’s fourth quarter. The year over year
gain in net sales, however, remained flat.

Kohl’s
Guidance For Fiscal 2020

In
fiscal 2020, the company said it expects its same-store sales to remain within negative
1% and positive 1%. The retailer also highlighted that its forecast doesn’t
account for any potential hit to financial performance due to the Coronavirus
outbreak in China. Despite China NOT being a primary market for Kohl’s private
labels, it still, however, expects the health emergency to reflect in its
performance in the upcoming months.

In
terms of earnings per share, Kohl’s said that it now expects to make $4.20 to
$4.60 per share this year. Analysts’ have also forecast $4.59 of earnings per
share for Kohl’s in 2020.

At
the time of writing, Kohl’s
is exchanging hands at $37.43 per share in the stock market that marks an
over 20% decline in 2020 so far. Its performance in 2019 was also similar with
more than 20% of annual loss. Kohl’s is currently valued at $5.86 billion with a
price to earnings ratio of 8.58.